Thursday, January 29, 2004

Business and Innovation. Dave Pollard writes that businesses are once again starting at look at innovation as a way to grow, and discusses a survey by the Boston Consulting Group: In what I think is the most useful section of the article, several innovation 'traps' are outlined: The Denominator Trap -- believing an innovation can capture 100% of an existing product's market from competitors The Sustainability Trap -- underestimating the costs of sustaining market share for the product in years after the initial launch The Substitution Trap -- not anticipating how an innovation can cannibalize the market for the company's existing products The Uniformity Trap -- not treating every new product launch as unique, requiring different approach and sustenance The Tactical Trap -- short range thinking, not assessing the strategic impact of the new product, competitors' likely response, and the 'fit' of the product with the rest of the company's line, image etc. Some additional ideas that I suggest in my Innovation Incubator process: Consider having your core innovation team in a separate, autonomous business unit or company. Creative minds are often very entrepreneurial, and flourish when they are relatively free from bureaucracy, and when they have some of their own skin in the game. Use 'pathfinder' customers on your advisory team -- the select few existing customers who always seem to be a step ahead of the pack, open to new ideas, but solidly aware of marketplace realities Learn the process of 'thinking customers ahead'. Through scenarios, iterative 'what if' exercises, future state visioning and other practices, you can help your customers imagine where their own business will be and could be three or five years from now, and hence what they might want to buy from you by that time to stay ahead of the competition. Don't leave valuable knowledge on the table. An understanding of how consumer tastes are changing in completely different areas from those in which your business operates, an understanding of where the economy is going, and an understanding of demographic changes can provide enormous insight into the potential market for your innovations. In assessing ideas, don't overlook aspects other than customer enthusiasm: deliverability, quality assurance, sourcing of materials, strategic 'fit' with your other products, your company's image and your corporate 'culture', the 'packagability' of the product (easy to explain, distribute and use), possible alternatives, and possible conflicts (competing with your customers, regulatory hurdles). Some wonderful ideas have crashed and burned for reasons that had nothing to do with market acceptance. There's no such thing as too much testing. Small, continuous testing of every aspect of your innovations -- checking and rechecking the market, product quality, timing, ease-of-use, perceived value, life cycle, competitors' offerings, and many other things will allow you to 'fail fast and fail early', so that the probability of a successful launch is maximized. [E M E R G I C . o r g] 9:54:33 AM    Trackback []

Russell Ackoff resources on systems thinking. Like Jerry Michalski I've long been a fan of Ackoff's. Here are two posts of Jerry's from October that provide access to some of Ackoff's insight and wisdom about how to think about complex design problems. All of these items are worth your time.   Idealized redesign I've mentioned elsewhere that I'm a big fan of Russ Ackoff's thinking. Frustrated because I couldn't find a description of his methodologies for interactive planning and idealized redesign, I got permission to post a paper describing those processes (pdf format). I began to write a summary, but it is so crisply written that I recommend you read it yourself. What I will say is that idealized redesign made me realize that if you never take the time to imagine what you really should be doing, as an individual or organization, you'll never get there. It also brought home to me just how difficult a process redesign is, because we are so wedded to assumptions we don't notice, historic business models and other, often dysfunctional baggage we take for granted. posted by Jerry Michalski at 12:10 PM Some seminal documents from Systems Theory The discipline Operations Research (OR) has been highly influential. Robert McNamara and his Best and Brightest used OR techniques to plan and justify the way the Kennedy and Johnson Administrations ran the Vietnam... er, situation. (Eventually McNamara resigned, troubled by LBJ's decisions.) In 1979, Russ Ackoff wrote a paper that was a milestone in management thinking, though it is little known. Published in the Journal of the Operational Research Society at the height of OR's influence, The Future of Ooperational Research is Past (pdf) indicted the ways that OR had come to be used by its many practitioners. Ackoff followed that paper with a more hopeful one, titled Resurrecting the Future of Operational Research (also pdf). Shortly after he published these papers, Ackoff started the discipline of Social Systems Science and founded the Busch Center at Wharton, funded largely by Anheuser-Busch, one of Russ's major clients over time. Russ now heads Interact Design in Philadelphia. Like the idealized redesign paper I just posted, I have permission to post these two papers here. It's not every day you can see history change just a bit as you read an article. posted by Jerry Michalski at 12:25 PM [Jerry Michalski's Home on the Web] [McGee's Musings] 9:15:36 AM    Trackback []